As the U.S./Israeli bombing campaign against Iran has utterly failed, U.S. President Donald Trump moved the task of regime changing Iran from Defense Secretary Pete Hegseth to Treasury Secretary Scott Bessent.
Moving the task from a bygone TV host to a (twice) failed fund manager is unlikely to change the outcome of the conflict.
Ten days ago Bessent pre-announced a new economic campaign against Iran. Despite the time it has taken him since to form a new policy the outcome is meager. There are a few new sanctions against Iranian entities that may well hurt. But Iran has been under U.S. sanctions since the birth of Islamic Republic in 1979 and it is used to it.
The major new threat by the U.S. is of secondary sanction against non-Iranian entities which continue to deal with that country. But Bessent’s nearly eight minute long speech yesterday was vague on real measures involved in this. No timing or deadlines were uttered.
The reasons for that are obvious. Any attempt to get serious with secondary sanctions, especially against China, will hit back. Bessent inadvertently conceded that:
In an acknowledgment that a barrage of new sanctions aimed at countries around the world could have unwanted consequences, Mr. Bessent added: “Why would I want to blow up the global financial system?”
The whole threat was thereby revealed as a bluff:
Bessent’s announcement followed a familiar pattern. He’d spent days promising an “economic D-Day,” the sanctions equivalent of storming the beaches of Normandy. But when the announcement finally came, as one of our reporters put it, it was more like a warning shot.
The Chinese government for one does not agree with U.S. sanctions:
“Economic warfare and maximum‑pressure tactics do no help in resolving problems. They will only further fuel conflicts, trigger risk spillovers, disrupt global economic and financial order and impair the rights and interests of other countries,” [Chinese Foreign Ministry spokesperson Lin Jian ] said.
The top priority is to de‑escalate the situation and return to the track of dialogue and negotiation at an early date, Lin said, adding that China will take necessary measures to resolutely safeguard its own legitimate rights and interests, Lin added.
Tehran will assume that this new round of sanctions is intended to give the U.S. time to prepare for another attack. Its advantage lies in its ability to preempt it:
Over the weekend, Iran’s security chief issued a warning that any country that joined U.S. efforts to isolate Iran would be “regarded by us as an enemy.” Should the economic pressure ramp up, one analyst told Anton, Iran is likely to look for a way to put fresh military pressure on the U.S. or its Gulf allies.
Last night Iran damaged another tanker which had tried to pass through the Strait under U.S. protection.
There are open question Scott Bessent has yet to answer:
– What comes next? When?
– How, given that the military option has failed, will the U.S. react when (not if) Iran escalates?